If you have gone through a divorce, you may be wondering how it will affect your estate plan. Can you leave your ex-spouse as a beneficiary? Will New York’s law automatically remove them from your will?
It’s important to understand the state’s law regarding this matter and what you can do to ensure your estate plan reflects your wishes.
Here is what to know:
Automatic revocation
Under New York’s Estate, Powers and Trusts law section 5-1.4 (EPTL § 5-1.4), a final decree of divorce, annulment or judicial separation automatically revokes any revocable beneficiary designation or provision in a will/trust that favors a former spouse. Thus, they can no longer be named as a beneficiary or a fiduciary, such as an executor or trustee.
This law, in most cases, extends to automatically revoke a former spouse from being a beneficiary in a life insurance policy, bank account and retirement benefits plan.
If you fail to update your estate planning documents after a divorce, EPTL § 5-1.4 will generally apply. The state will treat your former spouse as having predeceased you. Consequently, assets designated for them will be distributed to contingent beneficiaries. And any appointments they have will be revoked, and, in turn, the court will choose other parties to serve.
What if you want them to remain in your documents?
If you want your former spouse to remain a beneficiary or in a fiduciary role, you can draft a new will re-designating them or use a codicil to explicitly state your intent to leave property to them. If you want to distribute retirement benefits to your former spouse, you should obtain a domestic relations order (DRO). Taking these steps overrides automatic revocation.
Going through a divorce can affect your estate plan substantially. Learn more to keep your documents updated and validate your wishes.